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Mylovanov, Tymofiy (Oktober 2004): Failure to Delegate and Loss of Control. SFB/TR 15 Discussion Paper No. 130




This paper provides an explanation for the frequently observed phenomenon of “inefficient micromanagement”. I show that a supervisor may get comprehensively involved into activities of a subordinate although a better option of delegation is available. This inefficiency persists in the absence of conflict of preferences and even as the cost of delegation becomes zero. The paper also demonstrates that imposing constraints on communication with a subordinate can be beneficial for a superior.